Method and apparatus for efficient handling of product return transactions

ABSTRACT

A method and apparatus for efficient handling of product returns to reduce associated costs. A computer system at a regional product return center scans a returned product for identifying information, accesses a manufacturer return approval computer system through the internet or the like, and then submits the identifying information to the manufacturer for return approval. The manufacturer computer system utilizes the identifying information to access an electronic registration database to determine whether the returned product satisfies applicable return criteria. If so, the product is approved for return to the manufacturer. The regional product return center preferably scans a plurality of returned products in a single session. In response to the product identifying information submitted by the regional product return center, the manufacturer provides a list of approved returns and unapproved returns, along with a return authorization number for the batch of approved returns. The regional product return center then assembles the approved product returns into a box, shipping pallet, or the like, applies a label indicating the return authorization label, and ships the batch to the manufacturer. Shipping costs can be saved by omitting rejected product returns from the shipment. The manufacturer can handle the approved product returns from the regional return center as a batch, thereby reducing costs.

This application is a continuation of application Ser. No. 09/809,072,filed Mar. 16, 2001, pending, which is a continuation of Ser. No.09/494,540, filed Jan. 31, 2000, now U.S. Pat. No. 6,269,344, which is acontinuation of Ser. No. 09/065,552, filed Apr. 24, 1998, now U.S. Pat.No. 6,085,172, which is a CIP of Ser. No, 08/725,259, filed Oct. 2,1996, now U.S. Pat. No. 6,018,719 the entire content of which is herebyincorporated by reference in this application.

BACKGROUND OF THE INVENTION

1. Field of the Invention

The present invention relates to a method and apparatus for efficienthandling of product return transactions. More particularly, the presentinvention relates to a technique which permits a manufacturer ordistributor of commercial products to quickly and inexpensively handleproduct returns while ensuring that the returned product satisfiesapplicable criteria for return.

2. Related Art

Product returns are a market reality faced by virtually everymanufacturer, distributor, supplier or retailer of commercial products.Unfortunately, handling product returns often requires a significantexpenditure of resources. For example, it may be necessary to employ oneor more individuals to verify that product returns satisfy therequirements of a company's return policy. Alternatively, a companymight choose to avoid the increased overhead associated with additionalemployees and be somewhat less diligent about verifying compliance withthe return policy. However, this alternative can increase costs due tothe higher number of improper product returns. Either way, additionalcosts must either by borne by the company or passed along to theconsumer.

In addition to the costs associated with verifying compliance with areturn policy, even proper product returns incur additionaladministrative costs. Examples of such costs include shipping andhandling of the returned product, repackaging and redistribution of thereturned product (if appropriate), disposal of certain returnedproducts, and the like. These costs must also be borne either by thecompany or by the consumer in the form of higher prices.

It is, of course, desirable to minimize costs associated with productreturns to permit reduced prices to the customer and/or provide improvedoperating margins for the manufacturer and/or the retailer. There aretwo major areas in which savings may be realized: (1) reducing thenumber of improper or fraudulent returns; and (2) improving efficiencyand reducing overhead in handling proper returns.

One technique for reducing improper returns is disclosed in commonlyowned, co-pending U.S. patent application Ser. No. 08/725,259, filedOct. 2, 1996, in the names of Philip M. Rogers and Peter J. Junger,which is hereby expressly incorporated by reference in its entirety.Briefly, that application discloses an electronic system for registeringproduct transactions to facilitate compliance with return policies andto reduce improper or fraudulent product returns under warranty. Such anelectronic registration system enables individual product identificationinformation to be gathered at the point of a transaction for inclusionin one or more transaction databases. Individual product identificationinformation (such as a serial number) may be stored in a localtransaction database along with additional information including atleast the date of the transaction. A transaction receipt, such as acustomer sales receipt which includes the individual productidentification information and the date of the transaction, can becreated. Additionally, the individual product identification informationand the transaction date may be communicated to a separate location forinclusion in a general transaction database.

Where a serial number is used to identify the individual product, acheck digit is preferably used in conjunction with the serial number. Inthis way, the validity of the serial number can be verified and, if itis invalid, a retail sales clerk or other system operator is prompted tore-enter the serial number. The serial number may be scanned, enteredwith a keypad, or input with any other suitable technique.

When a customer returns a product with a receipt, a retailer may notethe serial number appearing on the receipt and compare it to thereturned product. If the serial numbers match and all other returnconditions are met, the return may be accepted. When a customer returnsa product with no receipt, or a receipt that does not have a correctserial number, the retailer may search the local database for saleinformation concerning the specific item being returned. If no saleinformation is located (for instance if another retailer sold theproduct), the general database may be accessed and searched for salesinformation, and the return handled accordingly.

This system is helpful in reducing improper or fraudulent productreturns and, thus, in reducing costs associated with such returns.Additionally, by reducing the number of improper product returns andautomating various product return functions, handling costs associatedwith product returns are likewise reduced. However, there continues tobe a need to further reduce product return costs, particularly costsrelating to processing proper product returns. Accordingly, it is aprimary object of the present invention to provide a method andapparatus for efficient handling of product return transactions whichreduces costs while ensuring against improper product returns.

BRIEF SUMMARY

In accordance with one aspect of the present invention, a computersystem at a product return center location obtains identifyinginformation for a product which is to be returned. In the disclosedexample implementation, this identifying information is then submittedto a remote return approval computer system through the internet or thelike. The return approval computer system may then utilize theidentifying information to determine whether the returned productsatisfies applicable return criteria. If so, the product is pre-approvedfor return. The product return location preferably obtains identifyinginformation for a plurality of returned products at a time. In responseto the product identifying information submitted by the product returnlocation, the return approval location may provide a list of approvedreturns and unapproved returns, alone with a return authorization numberfor a batch of approved returns. The product return location may thenassemble the approved product returns and ship the batch to the returnapproval location. Shipping costs can be saved by omitting rejectedproduct returns from the shipment. The return approval location canhandle the approved product returns from the regional return center as abatch, thereby reducing costs.

BRIEF DESCRIPTION OF THE DRAWINGS

Various objects, features, characteristics and advantages of the presentinvention will be more completely understood and appreciated by carefulstudy of the following more detailed description of a presentlypreferred exemplary embodiment of the invention when read in view of theaccompanying drawings, wherein:

FIG. 1 schematically illustrates a typical arrangement utilized inhandling product returns;

FIG. 2 is a schematic diagram illustrating components which may be usedin connection with a preferred example implementation of the presentinvention;

FIG. 3 is a data flow diagram illustrating operation of the system ofFIG. 2;

FIGS. 4A through 4H illustrate various user interface screen displayswhich may be used in connection with an example implementation of thepresent invention;

FIG. 5 is a plan view of a pallet on which a plurality of returned goodsis stacked for return to a manufacturer, including a batch returnauthorization label which may be placed on the pallet; and

FIG. 5A further illustrates the batch return authorization label of FIG.5.

DETAILED DESCRIPTION OF A PREFERRED EMBODIMENT

The present invention is described in the context of a particularexemplary embodiment. However, it will be recognized by those ofordinary skill that modification, extensions and changes to thedisclosed exemplary embodiment may be made without departing from thescope and spirit of the invention. For instance, although the inventionis described primarily in the context of a retailer/manufacturer productreturn situation, the features, characteristics and advantages of thepresent invention could likewise be applied to a store headquarterssituation, a retailer/distributor situation, or adistributor/manufacturer situation. Also, it should be appreciated thatthe term “manufacturer” is used in a broad sense and may include, forexample, a supplier of goods that are sold under the supplier's label,but are manufactured by another company on behalf of the supplier. Inshort, the present invention is not limited to the particular formsdisclosed.

Referring now to FIG. 1, an example of a typical arrangement forhandling product returns is illustrated. The present invention, ofcourse, is applicable to other arrangements as well. In the examplearrangement of FIG. 1, a regional warehouse 1 operated by a large retailchain collects product returns from local retail stores 3A and 3B. Inthe illustrated example, retail store 3A is located in the NortheastUnited States and retail store 3B serves the mid-Atlantic region; theretailer regional return center warehouse 1 is located in the South; andthe manufacturer warehouse 5 is in the Pacific Northwest. Of course,this example is for illustrative purposes only, and it should beappreciated that other local retail stores, regional return centers,etc. would be present in an actual return network. Also, it should beunderstood that a product return network typically would be operated inconjunction with a product distribution network.

After the returned products arrive at the regional warehouse 1, they aresorted by manufacturer and/or product, and are shipped from the regionalwarehouse 1 to the manufacturer warehouse 5 for credit or replacement.The manufacturer then inspects the returned products to ensure that theycomply with necessary return conditions and, if appropriate, issues acredit or replacement product.

Each step of the foregoing example return process involves variousprocessing and handling requirements. For example, personnel at thelocal retail store must first review the product for compliance withapplicable return requirements (e.g., ensure that the product isreturned within the specified return period and verify that all partshave been returned), and then arrange for shipment to the appropriateregional warehouse by way of a truck 7 or other suitable means oftransportation.

Employees at the regional warehouse must unload the products receivedfrom the local retail stores, sort them by manufacturer and/or product,prepare them for shipment (e.g., place the returned products on shippingpallets). and arrange for the shipment to the manufacturer. Finally, themanufacturer must receive the returned product shipment, verify that thereturns are proper, repackage the returned products if appropriate, andconduct necessary bookkeeping to ensure that the retailer receivesproper credit for the return. It is noted that the foregoing is not anexhaustive list of the costs and efforts associated with processingproduct returns by the retail stores, the regional return centerwarehouses, and the manufacturers.

The present invention may be utilized, for example, in connection withoperations at the retailer regional return center warehouse 1 to reducecosts incurred by both the return center and the manufacturer. Inaccordance with one aspect of the present invention, significant costsavings can be realized by reducing or eliminating unnecessary shippingcosts by making a relatively early determination whether a productreturn will ultimately be accepted by the manufacturer or the like. Ifnot, the returned product need not be handled further, thereby reducingcosts.

In accordance with another aspect of the present invention, advancereturn authorization may be obtained for a plurality of products at onetime to establish an approved product return batch. The approved batchmay be properly labeled prior to return to the manufacturer. In thisway, product returns may be easily and efficiently handled in batchesrather than as individual units, thereby improving efficiency andreducing costs.

Referring now to FIG. 2, an example implementation of the presentinvention includes a return side portion 21 and a manufacturer sideportion 23 which are operable to communicate over an internet connection25. Briefly, the return side portion 21 may include a personal computer210 that includes, for example, an Intel 486 processor or higher with atleast 16 MB of RAM, a Microsoft Windows 95 or Windows NT operatingsystem, and browser software such as Netscape Navigator 4.0 or higher.The personal computer may also include a modem for direct connection toan internet provider through a dedicated telephone connection 212.Alternatively, an internet connection may be made by the personalcomputer 210 over a corporate network. Also, it may be possible toutilize a direct telephone link by modem between the return side portion21 and the manufacturer side portion 23 or even a hardwired connection.

A bar code scanner 214 is provided for scanning bar coded SKU and,possibly, serial numbers for returned products. Additionally, a printer216 is provided for printing transaction records and, if desired,printed versions of return authorizations from the manufacturer. As willbe discussed below in greater detail, manually prepared returnauthorization forms may be used as an alternative to printed returnauthorizations.

The manufacturer side portion 21 includes a computer system 230utilizing, for example, an IBM AS/400 computer and having an associateddata storage unit 234 for storing an electronic product registrationdatabase. The manufacturer side computer system 230 is capable ofcommunicating with the return side portion 21 over an internetconnection though telephone connection 232. As noted previously, othercommunication techniques between the manufacturer side portion 23 andthe return side portion 21 may also be utilized.

After the regional retailer return facility receives products for returnto the manufacturer, the return side portion 21 may access themanufacturer side portion 23 to screen the products for compliance withreturn requirements and to obtain pre-authorization of the returns. Inparticular, the return side computer 210 connects to the manufacturerside computer 230 by way of the internet or through other appropriatecommunication techniques. In the present example embodiment, themanufacturer side computer maintains a world wide web page for access bythe regional return center. Password protection may be provided toensure only authorized retailers are able to access returnpre-authorization features in accordance with the present invention. Forexample, each return center location that is permitted access to thepre-authorization features may be assigned a location identificationcode and a password. In such a case, both the location identificationcode and the password would be required before access is granted to theproduct return screening program.

FIG. 3 is a logic flow chart for the manufacturer side computer 230 inscreening returned products and processing pre-authorization requestsfrom the regional return center. As indicated in the top portion of FIG.3, the user first enters the appropriate location identification codeand password. FIG. 4A illustrates a screen which may be displayed at thereturn side computer to prompt the user to enter the locationidentification and password. Once this information is received by themanufacturer side computer, the password is validated at function block302. If desired, appropriate application maintenance procedures may beimplemented upon validation of the password.

Upon verification of the location identification code and the password,the manufacturer side computer 230 may cause a screen such as isillustrated in FIG. 4B to be displayed at the return side computer 210.As shown in FIG. 4B, existing batches saved in memory at themanufacturer side computer 230 are listed. Existing batches are thosefor which return products have been scanned, but which have not yet beensubmitted for return authorization. Preferably, items can only be addedor deleted from a batch up to the time that the batch is submitted forreturn authorization. In the present example implementation of theinvention, once the batch is submitted for return authorization, it willno longer be displayed on the batch status screen, but can be viewedfrom the RA Status screen described below in connection with FIG. 4H.

It is possible to display a number of information items on the batchstatus screen in addition to the batch number. For example, the batchstatus screen shown in FIG. 4B displays the date and time the batch wasopened, the total number of products that have been screened for returnvalidation, the number of accepted items, and the number of rejecteditems. Of course, additional information could be displayed if desired

A number of options are offered to the return center operator on thebatch status screen illustrated in FIG. 4B. In particular, the returncenter operator may open an existing batch, create a new batch, orsubmit a batch to the manufacturer for return authorization. To open anexisting batch, the desired batch may be selected in a conventionalfashion by using a mouse to highlight the batch number and then clickingon the “Open Batch” button. Similarly, a highlighted batch may besubmitted for return authorization by clicking the “Submit RA” button. Anew batch can be created by clicking the “New Batch” button.

A batch must be set up prior to screening returned products for returnauthorization. Depending on user preference, the return center operatormay establish a new batch for each pallet of returned products that isscreened for return authorization, each bill of lading, or based on thedate that the products are scanned. It is not necessary to limit thenumber of products that can be scanned for each batch.

Referring again to FIG. 3, when the return center operator either opensan existing batch or creates a new batch, control passes to functionblock 304. For a new batch, the manufacturer side computer 230 creates abatch header which includes information identifying the assigned batchnumber, any customer reference numbers, the return center address, thename and telephone number of a customer contact person, and the statusof the batch (e.g., product entry stage, pending approval, approved,declined, RA assigned, etc.). A new batch number will be assigned eachtime “New Batch” is selected. If an existing batch is opened, the headerinformation is retrieved from memory associated with the manufacturerside computer 230.

Once a batch is opened, the system is now ready to screen returnedproducts. Depending on the type of product for which returnauthorization is sought, the return center operator selects either “ScanHardware” or “Scan Accessories” by clicking the appropriate button (FIG.4B).

Referring now to FIG. 4C, to screen hardware product returns forcompliance with return criteria, the return center operator is promptedto enter the Universal Product Code (UPC) number for the product, theproduct serial number, and a store reference code (if desired). Thisinformation may be entered by scanning bar codes on the product withwedge scanner 214 (FIG. 2), or alternatively by typing the informationon the keyboard associated with return side computer 210. Otherappropriate techniques may be employed as well. The user may then clickthe “Validate” button to instruct the manufacturer side computer 230 toscreen the product for return approval.

As shown in FIG. 4C, the Scan Hardware screen then displays thesubmitted information including the UPC code, the serial number, adescription of the product, the date and time it was entered, and thestore reference if any. Again, other items could be displayed ifdesired.

Although various techniques may be used for validating the screenedproducts for compliance with return criteria, the electronicregistration system disclosed in the previously identified co-pendingU.S. patent application Ser. No. 08/725,259, filed Oct. 2, 1996, ispreferred for use in connection with the present invention. Briefly,such an electronic registration system establishes a database which thenmay be accessed at the time of product return to determine the date oforiginal sale and other information pertinent to determining whetherreturn requirements are met.

When the manufacturer side computer 230 receives UPC and serial numberinformation for return validation, control passes to function block 306of FIG. 3. The manufacturer side computer 230 then checks the electronicregistration database to ensure that the identified product meetsproduct return criteria, and posts the scanned information to a batchdetail file. The batch detail file preferably includes the UPC number,the serial number, an indication of product quantity, and status (e.g.,pending approval, approval good, error, or approval declined). Theelectronic registration database may then be edited to indicate that theproduct identified by the UPC code (function block 308) and serialnumber (function block 310) has been screened for return. Accordingly,the manufacturer side computer 230 can keep track of products that havealready been screened to avoid multiple submissions of a single productfor return.

There may be a number of reasons a hardware system will not qualify forreturn credit or replacement. For example, the warranty period may haveexpired, the serial number might not have been registered, an invalidserial number may have been received, the packaging may be missing, amajor component of the product may be missing, or the item might benon-returnable as part of the conditions of sale. If the product doesnot qualify for return, the return center can retain the rejectedproduct rather than ship it to the manufacturer, thereby saving the costof freight for shipping a product that does not qualify for credit.

A note is displayed across the bottom of the screen of the Scan Hardwarescreen when a hardware unit does not qualify for return. The displayedmessage is preferably for the last item scanned. If the return centeroperator would like to review the reason a previously scanned item didnot qualify for return credit, the operator may select “Actions” fromthe screen menu to see a list of available options. The operator maythen select “Reasons” to see a description of the reason the unit wasrejected. An example of a displayed reject reason is shown if FIG. 4D.Scanning may be resumed by pressing the <Esc> key on the return sidecomputer keyboard to close the menu screen. The scanning process isrepeated for each hardware item for which screening is sought.

Ideally, the return center operator stacks items qualifying for returnon a shipping pallet or the like. Non-qualifying items should be stackedon a separate pallet. It will then be unnecessary for return centerpersonnel to later sort through the products a second time to separatequalifying products from non-qualifying products.

The Scan Accessories display screen is illustrated in FIG. 4E. Thereturn center operator is prompted to enter the quantity of theaccessory that is to be scanned. For example, if return authorization isto be requested for three VHS cables, the operator will input “3” andthen use the <TAB> button on the return side computer keyboard toadvance the cursor to the UPC Number field. The UPC number may then bescanned or entered manually on the keyboard. If a Store Reference codeis used it may be entered prior to clicking the “Validate” button.

Once pre-screening is completed for the hardware and accessories, thereturn center operator may move back to the “Batch Status” screen. Thebatch may then be submitted for return authorization by clicking the“Submit RA” button. Referring now to FIG. 4F, the return center operatoris preferably prompted to enter the name and phone number of the personwho should be contacted with information or questions concerning thereturn authorization request. If desired, a customer reference number(e.g., a bill of lading number, file number, invoice number, etc.) maybe entered for an internal reference to identify the returnauthorization. If the information on the screen is not filled in or“Cancel” is selected, the batch will not be submitted for returnauthorization. However, the batch will continue to be visible from the“Batch Status” screen.

Referring again to FIG. 3, control goes to function block 312 uponsubmission of a return authorization request. First, the return centeroperator is asked to verify the contact information. An example of anappropriate contact verification screen for display on the return sidecomputer 210 is shown in FIG. 4G. If the contact information isverified, the manufacturer side computer 230 re-validates the good scansincluded in the submitted batch. Control then proceeds to function block314. If the good scans fail re-validation, control proceeds to functionblock 316, which flags the batch header with an error indication, andnotifies the return center operator of the failure. Otherwise, controlproceeds to function block 318 for automated approval.

Function block 320 checks to determine whether the automated approvalprocess was successful. If not, an e-mail message may be sent to amanufacturer's representative for the particular return center (functionblock 322). The return authorization request may then be reviewedmanually to determine whether the request should be approved (functionblock 324). If the manual review shows that the request was properlyrejected, the batch is flagged with an indication that the request wasrejected, and the return center is notified of the rejection (functionblock 326). However, if the request is approved, control passes tofunction block 328 to create a return authorization number and updatethe batch header to indicate the approved status. As indicated in FIG.3, control may also pass to function block 328 by way of function block320 if the automated approval process is successful.

FIG. 4H illustrates an example of an RA Status display screen which maybe used to inform the return center operator of the status of a returnauthorization request. As shown, the RA Status screen lists theauthorization status (e.g., pending, approved, rejected), the batchnumber, the customer reference number if any, the number of scans in thebatch, the submission date, the approval date if applicable, the RAnumber if applicable, and the expiration date by which the return mustbe completed.

Once the RA has been submitted and approved, the system may also providethe dollar value of the product that is authorized for return. Thisdollar value may be based on the lower of 1) the gross invoice pricepaid by the Dealer for the product, less the value of all allowances andincentives given to the Dealer, or 2) the vendor's net product pricingat the time of the return. In most cases, the dealer may deduct themonetary value of authorized returns from any existing or future vendorinvoices. Additionally, the system can be configured to comply with avendor's specific returns policy and guidelines.

The RA number should be placed on the products prior to shipping to themanufacturer for credit. Referring now to FIGS. 5 and 5A, the RA numberlisted on the RA Status display screen may be written on an adhesivelabel supplied by the manufacturer alone with the customer referencenumber (if applicable). Alternatively, the printer 216 (FIG. 2) may beused to print labels upon receipt of a return authorization number. Suchlabels are preferably placed on all four sides of the shipping pallet,the pallet is shrink wrapped and shipped to the manufacturer. The palletshould be shipped immediately to guard against expiration of productreturn dates. Of course, other shipping containers may be used as well.

The return authorization labels provide an easy reference to personnelat the manufacturer warehouse and permit simple and efficient processingof the returned. Because the returned products are received in a batchand have been pre-approved for return credit, less work is required inreviewing the returned products to verify compliance with returncriteria. As a result, the resources required to process the shipmentare reduced, and the manufacturer is able to more quickly credit thereturn center for the returned products.

While the invention has been described in connection with what ispresently considered to be the most practical and preferred embodiment,it is to be understood that the invention is not to be limited to thedisclosed embodiment, but on the contrary, is intended to cover variousmodifications and equivalent arrangements included within the spirit andscope of the appended claims.

What is claimed is:
 1. An electronic system for obtaining remote pre-approval for returns of uniquely identified products from a first location to a second location, comprising: an electronic database system containing information on the uniquely identified products and vendor return criteria for the products, said electronic database system being remotely located from the first location; an information processing system located at the first location and operable to obtain a unique product identifier from a product sought to be returned, said information processing system being operable to transmit the unique product identifier to the electronic database system; wherein the electronic database system is operable to determine whether the product qualifies for return based on the unique product identifier and the return criteria and to provide to the information processing system a return qualification indicator if the product qualifies for return.
 2. An electronic system as defined in claim 1, wherein the information processing system enables a unique product identifier to be obtained for a plurality of products, and the electronic database system is operable to determine whether each of the plurality of products qualifies for return based on each unique product identifier and the return criteria, and to provide to the information processing system a return qualification indicator for each product if the product qualifies for return.
 3. An electronic system as defined in claim 2, wherein the information processing system further includes a display which is operable to display the return qualification indicator for each product.
 4. An electronic system as defined in claim 3, wherein the information processing system further enables a plurality of products for which unique product identifiers have been obtained to be grouped as a batch of products and to have the unique product identifiers for the batch transmitted to the electronic database system as a batch.
 5. An electronic system as defined in claim 4, wherein the information processing system enables a plurality of batches of products to be defined, and further wherein the electronic database system processes each of the defined batches as a batch when determining whether the products in each batch qualifies for return.
 6. An electronic system as defined in claim 5, wherein the information processing system enables status information on each of the plurality of batches of products to be viewed on the display.
 7. An electronic system as defined in claim 1, wherein the electronic database system enables a return pre-authorization to be obtained which pre-authorizes a return of the product from the first location to the second location.
 8. An electronic system as defined in claim 6, wherein the electronic system enables a return pre-authorization to be obtained for each of the plurality of batches of products which pre-authorizes a return of the qualified products from the first location to the second location. 